Stocks have bounced back, the Dollar is trading lower, and gold and silver have surprisingly hung in there after yesterday’s more dovish post-meeting statement by the FOMC. As you probably could have guessed, the marketplace’s top concern this week was the latest meeting of the Federal Open Market Committee, which wrapped up yesterday afternoon. The meeting was expected to emit some very useful information regarding interest rate hikes in the United States, but in all reality really failed on that front.
As we look ahead to the rest of today as well as the final day of the week, I expect that the market will continue to digest the Fed’s statement while simultaneously keeping a close eye on equity markets as well as the value of crude oil. As we near the end of the year, I do not foresee many overly busy days on the open market as investors are gearing up for extended holiday vacations and fresh economic data that will be made public on the opposite side of the new year.
FOMC Statement Leaves Everyone Guessing
Because it wasn’t necessarily expected that the FOMC would make any policy shifts at this week’s meeting, no one was surprised when the meeting ended and interest rates remained put. Still, investors were on edge, waiting to hear what Janet Yellen had to say in her post-meeting press conference. You see, though no one was expecting interest rates to be raised this week, quite a large number of people were anticipating that the FOMC, through Janet Yellen, would announce a rough timeline for when rate hikes might occur.
Instead, Ms. Yellen shied away from offering any new insight into the future of interest rates here in the United States. The media heard her reiterate that there will still be “considerable time” before global economic conditions permit US interest rates to be raised. Keep in mind that, in recent months, members of the Fed have commented that slow growth on the part of other world economies is really putting a hamper on when the Fed might make a move to raise interest rates.
In response to her remarks, US equities surged forward, making their biggest single-day gains this year. As of the writing of this post early Thursday morning, US stocks are still performing well. Gold and silver, perhaps unsurprisingly, are taking advantage of Yellen’s more dovish comments and are making decent gains after beginning the week in dismal fashion. As we head into the final day and a half of this 5-day trading session, it will be interesting to see what direction precious metals head in. Perhaps safe-haven demand will encourage more physical purchases, but, on the other hand, perhaps the progress of equities might distract investors and shift their attention away from gold and silver.